Google Hit With $5 Billion Antitrust Fine
Google has been fined $5 billion USD for breaking antitrust rules. European officials ruled it had acted unfairly in the way it linked its own services with Android devices.
The fine comes from the European Commission, the administrative wing of the European Union, whose competition rules apply in 28 countries.
It says Google breached the rules through the restrictions it places on companies that want to use its Android system on phones and tablets. Although the system is technically open source, regulators say three elements of Google's set-up go too far in promoting its other products and services. (Source: europa.eu)
Google Paid Manufacturers to Include Search App
First, Google forced manufacturers to pre-install both Chrome and the Google Search app as a condition of being allowed to include the Google Play app store.
Second, the commission says Google paid phone makers and cellphone service carriers to include the Google Search app on phones and not to include rival search apps.
Finally, Google had a rule that a manufacturer that includes Google apps on at least one of their devices must not sell any device at all that runs a modified version of the Android system rather than one approved by Google.
The fine of €4.34 billion is far more than that imposed on tech firms in similar previous cases, which is partially because it takes into account Google's income. In fact it's more than the total fines imposed on business of all types by the European Commission during 2016.
Further Penalties a Possibility
Despite the size of the fine, it could have been worse. The maximum allowable penalty was 10 percent of the revenue of Google's parent company Alphabet, which could have meant a fine of US$11 million.
Google says it will appeal against the ruling. Unless that's successful, it not only has to pay the fine, but will have 90 days to change its behavior to comply with antitrust rules. If it doesn't meet that deadline it will start racking up penalties equivalent to five percent of its revenue.
According to Google, the ruling doesn't take account of the competition between Android and iPhones. It also says doesn't reflect the wider picture of how Android offers more choice and flexibility to manufacturers and developers. (Source: blog.google)
What's Your Opinion?
Do you agree that Google's actions are anticompetitive? If so, is the level of the fine appropriate? Should competition laws be based on principles or require proof that consumers have suffered harm?
My name is Dennis Faas and I am a senior systems administrator and IT technical analyst specializing in cyber crimes (sextortion / blackmail / tech support scams) with over 30 years experience; I also run this website! If you need technical assistance , I can help. Click here to email me now; optionally, you can review my resume here. You can also read how I can fix your computer over the Internet (also includes user reviews).
We are BBB Accredited
We are BBB accredited (A+ rating), celebrating 21 years of excellence! Click to view our rating on the BBB.
Comments
Rolling in the dough
I remember when Microsoft was hit with a similar fine for including Internet Explorer in their operating system as the default browser. Here we are about a decade later and Google is in the same boat, though the circumstances are slightly different.
Sometimes I wonder if the European Union sits around all day long making up "antitrust rules" just so they can rake in the cash. Where does all this money go? Five billion dollars is an obscene amount of money to fine a company.
Personally, I'd rather see such penalties go toward oil companies for price gouging their customers at the pump on a daily basis for insane price fluctuations. I thought we were energy independent?
GOOGLE vs IPHONE
Dennis,
How is it that Apple hasn't been found guilty of these types of practices? In their systems, EVERYTHING is controlled by Apple, ie; maps, searches,programs, even the access is is limited to "10 strikes and youu're out!".
Why is it that the oil companies are seen as so bad? The automobiles that use that prouct have gone from $3,000 for a 1970 Nova with gas at $.75-$1.10 all the way up to $30,000 for an equivalent auto today with its gas at $2.55-$3.00. So in 48 years, automobiles have risen a multiple of 10 times, but gas has risen a mere multiple of 4. Why all the frustration?
5 billion is crumbs to Google
It will take Google 16 days to recoup the 5 billion.
Agree with Dennis
I'd laugh if they said we're not going to pay it.
Agree
"Sometimes I wonder if the European Union sits around all day long making up "antitrust rules" just so they can rake in the cash." Good comment.
This does seem a "trifle" punitive (!)and smacks of vindictiveness. The EU is a bit of a faceless crowd who don't seem to like big business and make up their own rules as they go along. What happens if Google flatly refuses to pay the initial fine and any monetary punishments thereafter? Do they get a smack on the wrist and banished to the naughty step? How is all this business enforced?
anti-competitive
Google is anti-competitive, and I prefer their services most of the time without their obnoxious persistent market control attempts.
With respect to the story, are we talking millions or billions? note in the final Penalties section - "The maximum allowable penalty was 10 percent of the revenue of Google's parent company Alphabet, which could have meant a fine of US$11 million."